Financial Instruments

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Financial Instruments

Note 7. Financial Instruments

Short-Term Investments:

Debt securities

The following tables summarize the Company’s debt securities by significant investment categories as of December 31, 2018 and December 31, 2017 (in thousands):

	December 31, 2018								December 31, 2017
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Certificates of deposit (non-U.S.)	$	5,538	$	—	$	—	$	5,538	$	12,809	$	—	$	—		$	12,809
Corporate bonds		—		—		—		—		11,003		86		(24	)		11,065
Total	$	5,538	$	—	$	—	$	5,538	$	23,812	$	86	$	(24	)	$	23,874

The Company classifies the investments listed in the above table as available-for-sale debt securities. These investments are stated at fair value as required by the applicable accounting guidance. Unrealized gains and losses on available-for-sale debt securities are included in the Consolidated Balance Sheets as a component of Accumulated other comprehensive (loss) income. As of December 31, 2017, the available-for-sale debt securities have been in an unrealized loss position for less than 12 months. As of December 31, 2018, the contractual maturity of our available for sale debt securities was within 1 year.

Investments in the above table are included in short-term investments on the Consolidated Balance Sheets. Realized gains and losses on investments are included in earnings and are derived using the specific identification method for determining the cost of securities sold.

Long-Term Investments:

The following table summarizes the Company’s long-term investments by significant categories as of December 31, 2018 and December 31, 2017 (in thousands):

	As of December 31, 2018		As of December 31, 2017
Equity investments:
Marketable equity securities	$	5,562	$	5,718
Non-marketable equity securities		9,987		10,092
Equity method investments		12,507		22,021
Other investments		17,239		33,251
Total	$	45,295	$	71,082

Equity investments

The following discusses the Company’s marketable equity securities, non-marketable equity securities, realized and unrealized gains and losses on marketable and non-marketable equity securities, as well as its equity method investments.

Marketable equity securities

Marketable equity securities are deferred compensation plan assets related to non-qualified deferred compensation plans for certain executives, including money market funds and mutual funds with readily determinable values which are accounted for at fair value.

Prior to January 1, 2018, the Company accounted for its marketable equity securities at fair value with unrealized gains and losses recognized in Accumulated other comprehensive (loss) income on the Consolidated Balance Sheets. As of December 31, 2017, investments had an amortized cost of $5.1 million and unrealized gains (loss) of $0.8 million and $(0.1) million, respectively. Realized gains and losses on marketable equity securities sold or impaired were recognized in Loss on investments in the Consolidated Statements of Income.

On January 1, 2018, the Company adopted the accounting standard Recognition and Measurement of Financial Assets and Financial Liabilities. Marketable equity securities are measured at fair value. Upon adoption, the Company reclassified $ 0.7 million net unrealized gain related to its marketable equity securities from Accumulated other comprehensive (loss) income to opening Accumulated deficit. Starting January 1, 2018, unrealized gains and losses are recognized in the Consolidated Statements of Income. As of December 31, 2018, investments had an amortized cost of $5.9 million and unrealized gain (loss) of $0.6 million and $(1.0) million, respectively.

As of December 31, 2018, and December 31, 2017, the Company’s marketable equity securities have been in an unrealized loss position for less than 12 months.

The classification of marketable equity securities as current or non-current is dependent upon management’s intended holding period, the security’s maturity date and liquidity consideration based on market conditions. If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current.

The sale and/or maturity of marketable equity securities resulted in the following activity (in thousands):

	Years Ended December 31,
	2018		2017		2016
Proceeds from sales	$	79,473	$	165,301	$	25,931
Gross gains		5		16		33
Gross losses		—		—		—

Non-marketable equity securities

Non-marketable equity securities are investments in privately held companies without readily determinable market values. Prior to January 1, 2018, the Company accounted for its non-marketable equity securities at cost less impairment. Realized gains and losses on non-marketable securities sold or impaired were included in loss on investments, included in the Consolidated Statements of Income.

On January 1, 2018, Company adopted the accounting standard Recognition and Measurement of Financial Assets and Financial Liabilities which changed the accounting for non-marketable securities. The Company elected the measurement alternative for these investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence. Under the measurement alternative, these investments are carried at cost less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Resulting adjustments are recorded within the Consolidated Statements of Income as loss on investments.

There have been no adjustments to the carrying value of investments resulting from impairments or observable price changes in 2018. For the year ended December 31, 2017, the Company concluded that one private company had indicators of impairment, as the cost basis exceeded the fair value of the investment, resulting in an other-than-temporary impairment charge of $2.8 million. These charges are reflected in “Loss on investments” in the Consolidated Statements of Income.

Equity Method Investments

The Company owns certain investments in limited liability companies and partnerships that are accounted for under the equity method, as the Company has significant influence over operating and financial policies of the investee companies. Our share of gains and losses in equity method investments including impairment are included in loss on investments in the Consolidated Statements of Income. Due to the timing of receiving financial information from these limited liability companies and partnerships, the results are reported on a one quarter lag.

The following table summarizes the ownership structure and ownership percentage of the non-consolidated investments as of December 31, 2018, accounted for using the equity method.

Name of Investee	Ownership Structure	% Ownership
MPEG LA	Limited Liability Company		8.4	%
Music Choice	Limited Liability Partnership		18.2	%
Conditional Access Licensing (“CAL”)	Limited Liability Company		49.0	%

Other Investments

The Company holds investments in certain life insurance contracts. The Company determined the fair value to be the amount that could be realized under the insurance contract as of each reporting period. The changes in the fair value of these contracts are reflected in “Loss on investments” in the Consolidated Statements of Income.